In the 1980s, faced with unemployment figures of 17 squillion and rising, some bright spark in the Conservative government came up with a jolly wheeze.

"Look James, we're going to have to get these numbers down somehow.. I know! What about splitting out all the people who, say, can't work because they're ill or 'incapacitated' and just not counting them as unemployed ?"

"Why, Charles, that's brilliant! Then they won't be 'jobless', just unable to work.

Now, 20 years later, we're all paying for what was a short-term fix, but none are paying for it more than the people in the benefit trap.

According to the latest Office of National Statistics report covering 2006, 62 per cent of the 58.8million people in the UK are of working age (you do the maths).

Of that 62 per cent, more than a fifth are "economically inactive", and 16.1 per cent don't want a job.

Admittedly a large percentage of them will have retired early, be looking after children or caring for relatives, many will be disabled or genuinely chronically ill, but that still leaves a large number who are on benefits and could work if they were motivated or supported.

And it's those people that the Work and Pensions Secretary James Purnell had in his sights with his proposed welfare reforms.

His proposals aim to get a million people off incapacity benefit within seven years, a figure many people will find astonishing.

But not as astonishing as this one - that's only around a THIRD of the almost 3,000,000 people claiming incapacity benefit in the UK.

Contrast this with the situation in the US, where they've organised a concerted effort to get people off benefits and back into work.

As ever, there is the carrot and a stick.

The stick is simple - if, after two years, you don't have a job and can work, your benefits are slashed, leaving you surviving on very little.

Many consider this two year period about 23 months too long, but that's to misunderstand the real position people find themselves in after generations of unemployment, often in areas where there is no tradition of work and where claiming benefit is the norm.

Getting these people back into jobs is not easy, with cultural and psychological barriers.

The carrot, US-style, is provided by private sector job centres where people in receipt of benefits get their own personal "job manager" who coordinates educational programmes, computer courses and other training. Some of these centres have creches and counsellors and some have a "clothes library" so attendees can go to interviews as prepared as possible.

It appears to work. Some US states, where this initiative was introduced 20 years ago, have seen the number claiming unemployment or similar benefits fall by 80 per cent.

"Hurrah!" say many taxpayers who resent shelling out their hard-earned wonga on people they simplistically regard as "spongers", but it's not that simple when you dig deeper. In fact, the savings to the US Treasury from these schemes are minimal.

In general terms there has hardly been a drop in the welfare budget in states such as Wisconsin, because the government spends as much money finding people work as they would just keeping them on benefits.

It would be great if we could cut the benefits bill in real terms, if we were able to get people into jobs and keep them there. But that's going to take time and a concerted effort from the public, private and voluntary sectors before we stand any chance of breaking the dependency culture and lack of confidence which is robbing many otherwise employable people of their ability to contribute more to society.

But back to the figures again. Being told that the government pays out £12billion a year in incapacity benefit, confronts you with such ahuge number as to be virtually meaningless.

It's heartening to consider the US doesn't have a monopoly on solutions when it comes to breaking the cycle of benefit dependency-For example, "Glasgow Works", a partnership under the chairmanship of Jim McColl, was set a target of moving 12,000 people from welfare into work in the city by June 2009.

New figures released show a reduction of 8,760 - meaning three-quarters of the target has been met, with half of the period still to go.

The encouraging success of Glasgow Works was emphasised at the end last month when it was announced that the scheme was so effective that it would be extended until 2011.

And in North Lanarkshire, an area very badly hit by the closure of heavy industries, the local authority is pioneering a partnership approach to give local people the support they need to rebuild their lives by getting into work.

After all, if the economy is to recover from what is a much overdue correction, businesses will need access to more trained employees.

Especially since the hard-working Polish workers who have underpinned our economic growth in recent years have decided they can't stand the baking heat of another Scottish summer and are heading back home.

'It would be great if we could cut the benefits bill in real terms, if we were able to get people into jobs and keep them there'

'Twenty years later, we're all paying for what was a short-term fix, but none are paying for it more than the people in the benefit trap'

Alex Barr is a director with leading PR consultancy The BIG Partnership